Phospholipid vesicles are spherical shell-like structures of subcellular size that are produced by sonication of phospholipids in aqueous solution. Since a variety of materials can be encapsulated in these vesicles, they are ideal vehicles for transporting molecules from the site of application to target organs in the body. In order for this approach to be successful, the vesicles must not only reach the appropriate tissue, but must also release their contents at the desired time. Our primary research goals for the current year have been to investigate the effects of the addition to phospholipid vesicles of a series of carbohydrates covalently bound to cholesterol that appear to cause dramatic changes in the lifetime of the vesicles in vivo and in their tissue distribution. The extended x-ray absorption fine structure which extends to energies above 1 keV above an atomic absorption edge provides structural information on systems of interest in biology. Most of these applications have been carried out with the synchrotron radiation source at the Stanford Synchrotron Radiation Laboratory. The goal set for the current year was to complete the design and construction of a laboratory EXAFS spectrometer with the support of equipment funds provided by the National Science Foundation. It is proposed to apply the laboratory EXAFS system to structural studies of biological molecules.